B&O tax needed this year

New rates set to go into effect on Aug. 1

July 3, 2014

WEIRTON - City Council voted 3 to 2, with one abstention, to approve the second and final reading of an ordinance to expand the business and occupation tax at a special session Tuesday.

The tax is being expanded to help make up for a projected $1.6 million shortfall in the municipal budget in the 2014-2015 fiscal year, which began Tuesday.

Previous reports related to the city's budget woes incorrectly stated that the shortfall was forecasted for the 2015-2016 fiscal year, according to City Finance Director Tom Maher. He said Wednesday that the situation is more time sensitive than that.

"The shortfall is happening this fiscal year. The budget that we submitted to the state in March is balanced, but it is not feasible," he clarified. "There is a lot of misinformation out there. I provide information to City Council, the city manager, the mayor and city officials. I can't control incorrect statements made by others."

Maher said more information will be made available to the public about the B and O around the end of October, when the first collection is slated to take place.

City Manager Valerie Means had no comment when contacted Wednesday afternoon.

Brenda Mull, president of the Weirton Area Chamber of Commerce, said that doesn't change their stance.

"For the business community, the answer is still the municipal sales tax," she said. "We don't understand why the shortfall wasn't addressed much sooner when a decline was first noticed. We have said several times that the city didn't get into this problem overnight."

The B and O tax will go into effect Aug. 1, and rates will be set in accordance with a budget scenario proposed by Ward 6 Councilman David Dalrymple.

Most categories will be set to 25 percent of their maximum allowable rate. Current B and O categories will remain the same, with production and utility categories set to 100 percent of the maximum allowable rate. Retail will be set to 75 percent of the maximum allowable rate, which is 0.375 percent, with a $500,000 annual exemption ($125,000 per quarter). Service will be set to 65 percent of the maximum allowable rate, which is 0.65 percent, with a $100,000 annual exemption ($25,000 per quarter). Contractors will be set to 100 percent of the maximum allowable rate, which is 2 percent, with a $100,000 per project exemption.

The proposed scenario would also reduce the police and fire service fee by approximately 20 percent. Residential fees would decrease from $50 to $40. Commercial fees would decrease from 15 cents per square foot to 12 cents per square foot and churches and schools would see their rate decrease from 8 cents per square foot to 6 cents per square foot.

The plan includes a stipulation that any excess funds superseding the projected $1.6 million budget gap "shall be targeted toward security."

Dalrymple's proposal would generate an estimated $1.7 million in additional revenue, figures indicate.